By Pension and Benefits Editorial Staff
The IRS has updated the applicable percentage table used to calculate an individual’s premium tax credit and required contribution percentage plan years beginning after 2020. The percentage is used to determine whether an individual is eligible for affordable employer-sponsored minimum essential coverage; the percentage is used to determine whether an individual is eligible for an exemption from the individual shared responsibility payment because of a lack of affordable minimum essential coverage.
For plan years beginning in 2021, the required contribution percentage under Code Sec. 36B is 9.83 percent. Further, the IRS and the Treasury department have determined that the failsafe exception described in Code Sec. 36B(b)(3)(A)(ii)(III) applies for calendar year 2021 and no additional adjustment under Code Sec. 36B(b)(3)(A)(ii)(II) is required for calendar year 2021. The guidance is effective for tax years and plan years beginning after December 31, 2020.
SOURCE: Rev. Proc. 2020-36, IRB 2020-32, August 3, 2020.
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